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Lithium Sector Heating Up, But It Hasn't Bubbled Yet 0 comments

About a year and a half ago I had a brain storm, thinking that with Tesla (NASDAQ:TSLA) and electronic cars seemingly poised to go mainstream over the coming years, an investment in the Lithium space seemed like a good bet.

So I researched it, and something interesting kept popping up, articles that advocated avoiding investing in Lithium Mining Companies. Here's a prime example from last August with the very blunt title:

Don't Invest in Lithium Mining Companies

This article was forthright in its opinion, saying in part:

  • Any lithium "junior mining stocks" with promises of "valuable reserves" trying to ride on the coattails of Tesla should be avoided like the plague.

Great advice (sic).

Those heeding it, who might have been considering an investment in a company like Nemaska Lithium (OTCQX:NMKEF) (which I've blogged about several times over the past year) would be chagrined to know that NMX on the TSX Venture exchange went from less than 25 cents in August of 2015 to its current PPS of about 90 cents. In the past 12 months it has climbed about 500%. If that kind of ROI is the plague, then bring on the plague.

Then there's Orocobre, (OTCPK:OROCF) also traded on the TSX with the symbol ORL which was trading around $1.80 at the start of August 2015 and fell all the way to the $1.40 area before the end of 2015. Its now trading over $3.

And let's not forget the most recent big star performer, Lithium X Energy (LIXXF) which trades on the TSX Venture under the symbol LIX. It just started trading at the end of November 2015 via a reverse merger. After opening around 40 cents its now trading up around $1.50.

For those who "avoided junior lithium mining stocks like the plague" as the earlier linked article suggested...well, they're probably kicking themselves now.

Now, to be completely fair not every Junior Lithium stock has experienced wild growth. One that I own, Lithium Americas (OTCQX:LACDF)...